Tag Archives: Spotify

On February 28th 2018, Spotify filed for direct listing on the New York Stock Exchange

Spotify is a music-streaming service that changed the music industry. The Swedish company was founded in April 2006, and on 7 October this year, the company has been on the market in ten years. It is developed by startup Spotify AB in Stockholm and now they want to sell shares to investors.

According to Spotify`s filing yesterday, the opening public price of its ordinary shares on the NYSE will be determined by buy and sell orders collected on the day of the listing. CEO Daniel Ek owns 9 percent of the company. Martin Lorentzon has 12 percent, but they will have full control over the company. Together they have 80 percent of the voting rights.

Spotify has so far been a bad business, but they changed the music industry with its new business model, and the industry`s revenue are growing for the first time since the CD was their «milk cow.» Spotify have 140 million users and 70 million are paying for their service.

Their revenue in 2015 was $2,18 billion. According to the filing, Spotify paid about 88 cents for every dollar in revenue in fees to record labels in 2015. It seems like it goes in the right direction for the company as those costs has declined to about 79 cents.

On top of that, Spotify has stopped burning cash and their free cash-flow margin is 2,7 percent. At the end of last year, the company had about 1,5 billion Euros in cash, cash equivalents and short-term investments.

Spotify as a company doesnt sell stocks in the non-IPO, but their stockholders will try to sell their shares to the public stockholders. According to Spotifys not-an-IPO filing, their value was as low as about $6 billion and as high as $23 billion in private stock transactions since the start of 2017.

You can ask yourself why they are doing it this way instead of raising money from a conventional IPO. Spotify`s existing shareholders can sell their shares to public stockholders, and it would be a win-win if record labels could buy a stake in the company. They will help each other.

Spotify operates under a freemium business model which means basic services are free, while additional features aer offered via paid subscriptions. Spotify makes its revenues by selling premium steaming subscriptions to users and advertising placements to third parties.

In 2013, the company launched a new website called «Spotify for Artists,» and they pay copyright holders royalties for streamed music. Spotify for Artists states that the company does not have a fixed per-play rate, instead considers factors such as the users home country and the individual artists royalty rate.

Rights holders received an average per-play payout between $.006 and $.0084. Spotify encourages people to pay for music, and their subscriptions are their main revenue source.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Taylor Swift is out with a new album called “Reputation”, but it won`t be available on Spotify or Apple Music

Taylor Swift is out with a new album called «Reputation», but it won`t be available on Spotify or Apple Music. Not so far. This is the long-awaited sixth album with singles like «Look what you made me do», «Gorgeous» and «Ready for it.»

So, what are fans gonna do if they want the new album? The new album will be available at Walmart, Target, iTunes store and her own official store. Streaming will be possible at the iHeart Radio All Access Powered by Napster app.

Taylor Swift is not only a great artist, but also a smart business woman. She had previously pulled her own music from streaming services like Spotify in protest against low royalty payments.

She protested before the release of the new Apple Music streaming service in 2015, when she threatened to withhold her music from the service unless artist were paid fairly for their own music.

Adele did the same when she released her album «25». She waited for about seven months to release it to streaming services, and she can afford to do it like that. So can Taylor Swift. They are both famous enough to do it.

Spotify is probably years away from profitability. Last month they reported better deals with music labels with a 40% growth in revenue but they are still losing money. Investors estimate the value of Spotify to be about $16 billion, which is up from $13 billion earlier this year.

Spotify`s revenue for the first six months of the year is $2,2 billion. Gross margin is 22%, which is up from 15% in all of 2016. Operating loss is between 100 million and 200 million euros ($118,4 million and $236,8 million), according to the Information.

Spotify has about 140 million active users and more than 50 million are paid subscribers.

Taylor Swift`s new songs can all be found at YouTube. Not only the music but also the videos.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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$125.00

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Apple Music appeared to set a goal of 100 million paying customers

Apple Music has been growing fast in a very short period of time, but they are far away from its biggest competitor Spotify. This summer, Apple has been on the market in only two years, and have about 20 million subscribers.

This is pretty impressive and it makes Apple Music the second-largest on-demand streaming music site in the world right now. Competitors like Napster, Tidal and Deezer are far away from both Apple Music and Spotify.

 

Earlier this month, Spotify announced that it has reached a new milestone, which is a total of 50 million paying subscribers. That`s up 10 million since September last year.

This is actually not the whole picture right now, because the Swedish Streaming firm has over 100 million users were many of them are listening to the ad-supported free tier which is not possible at Apple Music.

The competition is hard and Spotify and Apple Music is far ahead of a handful of other competitors in a very difficult industry. Apple Music`s tactic using exclusives to lure new customers has not been “music in the ears” for Spotify, and they are both testing new features and subscription models to get new customers.

Apple Music plans to use original TV programming to entice subscribers, debuting shows like Carpool Karaoke on Apple Music.

Spotify has started testing a lossless version of its streaming service to attract audiophiles.

The popularity of streaming is growing and so are the number of users in the streaming music space. Apple Music appeared to set a goal of 100 million paying customers. Spotify need to double its user-base to reach that goal and will probably hit that milestone faster than Apple Music.

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Facebook are dealing with the music industry

Facebook has a lot of DAU`s and more and more people spend time watching videos. Facebook is a young company and so far they already have billions of video views. But Mark Zuckerberg want to prosper from this industry.

There is no doubt that YouTube is the most popular video-sharing company in the world. Many artist has started their carriere at YouTube and one of them is Justin Bieber. In 2016, YouTube gave the music industry $1 billion in ad revenue, and Facebook wants to join.

 

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Streaming was a game changer on how media is bought. It changed how it`s consumed. It also changed who profits from it, and of course how much they all made in this industry. For the first time in 20 years, the music industry saw significant revenue growth in 2015.

The revenue from streaming is $2,9 billion world-wide, and revenue from video on demand rose almost 9% in 2015, and music clips can move about $50 – $70 billion from TV industry.

Facebook has nearly 2 billion users and still a growing advertising business, and a deal with the music industry can be a win-win agreement, which means billions in revenue from new sales for the music industry.

The interest in videos is growing and Facebook want to prosper from that, and that’s why they are so interested in music rights. Facebook moved billions in ad revenue from print and now many online firms have targeted TV.

Facebook are not alone on the market and they need to share some of the market with Twitter and Snapchat, but the biggest of them all is YouTube which is Faecbooks main rival. Googles YouTube channel said music is one of the most popular types of videos on their on-demand service.

TV networks and News organizations are experimenting with Facebook, just like they did with YouTube and this will continue. This is interesting because Facebook is big.

Thanks to streaming, the music industry is growing again and that is because of the paid streaming services from Apple and Spotify.

Facebook will probaby sign a deal with the music industry before the summer this year.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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YouTube is dominant in the music streaming market and a new case for the European Commission

Consumer behaviour is very important for the music industry and a new research by IFPI contains key findings on changing consumer behaviour and provides valuable insights on the «value gap», which is the music industry`s most pressing priority.

«The value gap» is the massive mismatch between the growing consumption of music worldwide and the disproportionately small revenues that are returned to rights holders. It is caused by a market distortion allowing some major digital services to circumvent the normal rules of music licensing.

This denies musicians, artists, composers and investors fair compensation for their work; lowers investment in and diversity of new music; and skews competition among digital services. IFPI sees today`s proposal as a good first step in the process.

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Notably, the proposal confirms that user uploaded content services that promote and monetize music should be covered by the same copyright rules as other on-demand services.

Commenting on the proposal, IFPI Chief Executive, Frances Moore said:

«The music industry has transformed itself in recent years, licensing hundreds of services, widening choices for consumers and investing in new, creative ways to bring artists to a global audience.

But to achieve sustainable growth, the music sector needs a level playing field.

This means creating an environment where copyright rules are correctly applied so that creators and producers can be confident to invest and license. It also means allowing digital services to compete on fair terms and enabling consumers to enjoy access to diverse sources of licensed music.

«Today`s proposal is a good first step towards creating a better and fairer licensing environment in Europe. Importantly, it confirms that user uploaded content services such as YouTube, which are the largest source of on-demand music, should not be able to operate outside normal licensing rules.

However, there is a lot more to do to make this a workable proposal. We look forward to working on this in the coming months with the Parliament and Member States.»

The music consumer behaviour is changing, and this is the key report highlights:

  • Paid audio streaming is growing: 71% of internet users aged 16-64 access licensed music. Paid audio streaming services are growing in popularity, especially among under 25`s. One-third of 16-24 year old now pay for an audio streaming service.
  • YouTube is the most used music service: 82% of all YouTube visitors use it for music. More people use YouTube to consume music they already know than to discover new content.
  • Copyright infringement remains a significant problem: more than one-third (35%) of internet users access unlicensed music content. infringement is changing, with half (49%) of 16-24 year olds using stream ripping services to download music.
  • Young people are highly engaged with music: with 82% of 13-15 year-old listening to licensed music and the majority willing to pay for music.
  • Smartphones are moving towards replacing computers as the most used device for music consumption; especially in developing countries. Users of paid audio streaming services are particularly likely to listen to music on a smart phone.

Commenting on the report, Frances Moore, CEO, IFPI said:

«There are many positives for the music industry in this research: streaming services have revolutionised the experience of the music consumer, with growing numbers paying for audio streaming services;

listeners are responding to the benefits offered by on-the-go, on-demand access to music by moving more and more to the world of mobile, especially in emerging markets; and young fans are showing passion and engagement with music.

«Record companies, and the investment they make in music, are at the heart of this change. That investment is all the more important in the digital world, driving the creation of new music and helping artists connect with their fans.

«There are also key insights informing the policy debate on musics «value gap», the biggest problem for todays music sector. The research highlights the dominant position amongst music services of YouTube, as well as the fact that the site is used by consumers primarily to access music they know, on-demand.

Yet YouTube can get away without remunerating fairly artists and producers by hiding behind ‘safe harbour’ laws that were never designed for services that actively engage with and make available music enjoyed by the vast majority of its users.»

YouTube use a loophole in international copyright laws. The pay much lower licensing fees the music industry than services such as Spotify and Apple Music. YouTube considers itself a hosting platform rather than a content distributing platform.

This is a practice that has repeatedly been dismissed as unfair by record companies and competitors. YouTube say it is mostly a promotional platform for artists and record companies.

Spotify is twice as big as Apple Music. Spotify has 40 million paid subscribers, while Apple music has «only» 4 million. Spotify has 100 million of total listeners while Apple Music has 78 million.

To put that in perspective; YouTube doesn`t have any paid subscribers, but they are more than 8 times bigger than Spotify with its listeners.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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